Employment Law Update (September 2010)
Concern about pension rules resulting in employment
tribunals
The British Chambers of Commerce (BCC) has warned that the
latest corporate pension rules must be simplified or else risk
causing problems for employers and their staff.
The BCC says that the 'complex web of regulations' introduced by
the former government and passed at the start of this year could
hinder job creation and create concern amongst employers about
'getting the rules wrong' and then ending up in an employment
tribunal.
As of 2012, employers will be forced to enrol staff
automatically into a workplace pension scheme unless staff members
opt out. Enrolment must take place within four weeks of employment
and staff must be re-enrolled every three years.
Eventually, companies could be required to pay the equivalent of
three per cent of an employee's salary into their pension pot,
although this is set to be introduced in stages with larger
companies adhering to the rules first.
David Frost, director general of the BCC, encouraged the
Government to make the new legislation easier to follow. “There is
a whole raft of changes to employment legislation coming through
between now and 2014,” he said.
“At a time when we're trying to grow the economy and squeeze
every bit of growth out of it, this will have a destructive effect
on employers recruiting labour. This could dampen demand for jobs
in the UK,” he added.